DOL raises the minimum wage floor to $13.65. Here's what you owe and when.
The Department of Labor updated the prevailing minimum wage for SCA-covered contracts. If you have active work or open bids priced against the prior rate, you need to act before May 11th.
Welcome to Issue 001. This newsletter exists because the SCA community has always deserved a sharp, plain-English briefing and has never had one. We plan to fix that, bi-weekly, starting now.
Today: DOL just moved the minimum wage floor to $13.65 effective May 11th. Keep reading to learn exactly what that means for your contracts, your bids, and your fringe program.
In this issue:
💰 Minimum Wage Floor Raised to $13.65
⚖️ SCA Coverage & Staffing Workers
📋 EEO-1 & OFCCP Risk
📅 Successor Contract Window
📖 Know the Reg
Effective May 11, 2026, the hourly minimum wage for certain SCA contracts subject to area wage determinations rises to $13.65 per hour—up from $13.35. The $0.30 increase is modest on paper. Across a workforce of 50 covered employees working full-time, that’s roughly $31,000 in additional annual fringe obligations you didn’t price into existing contracts.
The new minimum wage rate applies to federal contracts entered into between January 1, 2015 and January 29, 2022, that were not renewed or extended on or after January 30, 2022. The new rate does not apply to contracts entered into after January 20, 2022. Specifically, Executive order 13658 (signed February 12, 2014) established a minimum wage for workers on covered federal contracts.
What to do before May 1st
Step 1. Audit your contract portfolio and identify all SCA covered contracts entered into between Jan 1, 2015 and Jan 29, 2022, that have not renewed or extended.
Step 2. Notify and coordinate with your payroll and HR teams to ensure wage systems are updated to reflect $13.65 effective May 11, 2026.
Step 3. Review subcontractor flow-downs.
Step 4. Update cost accounting and forecasting for affected contracts through the remaining period of performance.
Step 5. Post required notices. EO 13658 requires contractors to post notices of the applicable minimum wage rate in a prominent and accessible place at the worksite.
Context: EO 13658 vs 14026
Be aware that two separate EO wage schedules are currently in effect. EO 14026 (signed April 27, 2021) applies to contracts entered into, renewed, or extended on or after January 30, 2022, and carries a higher minimum wage rate. The $13.65 rate exclusively applies to the older EO 13658 population of contracts. Contractors who have both pre-2022 legacy contracts and newer contracts should maintain parallel compliance tracking to avoid applying the wrong rate to the wrong contract.
In Brief
1. SCA COVERAGE SCOPE
Your staffing agency workers may be SCA-covered. Most contractors assume they’re not.
SCA coverage isn’t determined by your contract structure — it’s determined by the nature of the work. If a worker placed by a staffing agency is performing services that would be SCA-covered if performed by a direct hire, WHD’s economic reality analysis often finds coverage applies anyway. The H&W obligation can follow the work, not the W-2. Contractors with a significant contingent workforce on federal sites should map their SCA coverage scope against their actual workforce arrangement—not just their payroll headcount. The gap between those two numbers is where WHD finds back wages.
2. OFCCP RISK
EEO-1 data is now public. OFCCP uses it. Do you know what yours shows?
Aggregated EEO-1 workforce data from recent filing cycles is now publicly accessible. This matters for SCA contractors because OFCCP increasingly cross-references industry workforce composition benchmarks when selecting contractors for compliance reviews. The data itself isn’t the risk. The risk is not knowing how your submission compares before an OFCCP scheduling letter arrives. Pull your last EEO-1 filing and look at your job group composition against the public aggregates for your NAICS code. Surprises are better found internally.
3. SUCCESSOR CONTRACTS
Q2 is the riskiest quarter for successor obligation failures. Here’s why.
Federal fiscal year runs October–September, which means January–March is when many contract recompetes transition. If you’ve recently won a successor contract and haven’t formally requested the predecessor’s seniority list within 10 days of contract award, you may already be in violation. That list determines which employees you’re obligated to offer employment. It’s not optional, and “we didn’t know” is not a WHD defense.
Know the Reg
29 CFR Part 4 · Term of the Issue
Bona Fide Fringe Benefit
Under 29 CFR Part 4, the H&W fringe obligation is only satisfied by a “bona fide” benefit. Meaning a genuine, ongoing commitment to employee welfare, not just an accounting entry. A plan that technically charges H&W contributions but returns forfeitures to the employer, layers excessive administrative fees, or provides coverage that never actually insures the worker does not qualify.
The WHD looks at the net benefit delivered to the employee, not the cost shown on the employer’s books. Plans that fail this test leave contractors liable for the full H&W fringe in cash, retroactively, plus potential back-wage penalties. If you’re not sure whether your plan qualifies, ask your plan administrator for a written bona fide determination.
On the Horizon
Apr 1
Q2 WHD reporting cycle closes. Begin pulling your certified payroll records for any audits pending from Q4 2025 activity.
May 11
Minimum wage rate effective date. $13.65/hour applies to all area WD contracts. This is not a grace period deadline; it’s a hard effective date.
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